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Viewpoint With Eliot Spitzer

News/Business. (2012) (CC) (Stereo)

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01:00:00

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528

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480

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Boehner 10, Us 7, John Boehner 5, Obama 5, Eliot 5, Goldman Sachs 4, Karl Rove 3, Colorado 3, Jim Breuer 3, Muffy 3, Joe Biden 3, Steve King 2, Forsythe 2, Joe 2, Joe Williams 2, New York 2, Greg Smith 2, Sean Hannity 2, Paul Krugman 2, Puerto Rico 1,
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  Current    Viewpoint With Eliot Spitzer    News/Business.   
   (2012)  (CC) (Stereo)  

    November 10, 2012
    1:00 - 2:00am PST  

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weekend. [ ♪ theme music ♪ ] >> eliot: good evening i'm eliot and this is "viewpoint." which side will blink first as the country heads towards the tax hikes and program cuts that make up the so-called fiscal cliff. president obama and senate democrats coming off a smashing re-election victory or speaker of the house john boehner and his tea party cohort determined to hold the line against higher tax rates on the well-to-right now both sides seem to be digging in. president obama used a campaign-style white house appearance today to declare that while he's willing to compromise with the republicans his bisque position has not changed. >> obama: as i said before we can't just cut our way to prosperity. if we're serious about reducing the deficit we have to combine
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spending cuts with revenue, that means asking the wealthiest americans to pay a little more in taxes. on tuesday night we found out that the majority of americans agree with my approach. and that includes democrats independents, and a lot of republicans. >> eliot: mr. obama also said that he planned to meet with speaker of boehner and other congressional leaders at the white house next year along with business and labor leaders. the president made it clear that even while talks were under way he wanted the house to move quickly to pass a middle class tax freeze that has already cleared the senate. >> obama: let's not wait. even as we're negotiating the broader deficit reduction package. let's extend the middle class tax cuts right now. >> eliot: for his part, speaker boehner insisted that the g.o.p. plan which includes no new taxes was the bess alternative while pressuring the president to take charge. >> we can replace the spending cuts extend the current rates
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paving the way for entitlement reform as well as tax reform with lower rates. this is an opportunity for the president to lead. this is his moment to engage the congress and work towards a solution that can pass both chambers. >> eliot: despite boehner's hard line they believed they could compromise. >> he's a mainstream conservative. the hard right has chastened in a lot of ways. >> eliot: for more on the struggle i'm joined by representative chris van holland, ranking member on the house committee. congressman. thanks for joining us. >> great to be with you. >> eliot: congratulations on your own re-election. now that's behind you. it seems to me that the speaker and president are reiterating are where they were before the november election. so when do they begin to really dance in a way that shows give and take? >> well, first of all eliot
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the president did win the election. he made the point that this whole question of how to deal with jobs in the fiscal cliff was an essential part of the debate. there were things not talked about that much in the presidential election, but this was talked about. the president is on very strong ground. he went to the country and he said we move forward on jobs, and he laid out elements today. but that we also need to take this balanced approach to reduce this long-term deficit which combines cuts with revenue. revenue raised by asking higher income earners to pay more to reduce the deficit. the president said it clearly. house of representative speaker john boehner extend tax relief to 98% of the american people, 97% of all pass-through businesses then we can start talking about the other pieces that we need to deal with. but they should do that now. >> eliot: look, i happen to be
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in complete agreement with what you said, and i don't think the president should give at all. the president won the election. is the burden not on speaker boehner, and if he doesn't feel it yet how do you put additional pressure on him to articulate what he means. he said over and over again close loopholes. ones? what burden will that bring to bear on different people and how do you make the numbers square? why hasn't he answered that question? >> well, your putting exactly the right question to speaker boehner as have i. i think we should say okay, you talked just the other day putting tax revenue on the table. let's see your plan. the president has been clear and direct about how he would achieve this deficit reduction plan and how he would get the revenue. he talked about it again today. you know, during the campaign mitt romney kept refusing to provide the details of their plan. now speaker boehner should come forward. the speaker said we should do
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this in a transparent way, open this all to the public. mr. speaker, let's see your revenue tax plan, because so far it's not clear to me exactly what he is proposing. i don't know if is simply saying what republicans have said in the past that some how if you reduce rates on high income earners you're going to magical growth that pays for itself and doesn't increase the deficit. but we know that's not true. he needs to come forward and be as transparent as he said we all should be. what is his plan? >> eliot: that's the pressure that needs to be brought to bear on john boehner. the president could say okay, mr. speaker, you don't want to raise the marginal rate. here's the five loopholes that we're going to close that will get us the revenue we need, and the first one is the capital gains rate. we'll eliminate the different actual that is one essential piece. is that what you want to do? i would like to see boehner
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smoked out of the ambiguity that he has gotten away with. otherwise, i don't see the negotiation going forward, and the president needs to pressure him on that. >> i think we do need to smoke him out. simpson-bowles has laid out this framework. i don't endorse every specific particular but with. what needs to be pointed out within that framework they assumed as part of their baseline that we would get the revenue that would come from raising that top rate from 35% to 39%. that was part of the assumption in simpson-bowles. we need to be really careful that we don't box ourselves in in a way that ultimately we don't have a plan that does not have enough revenue combined with cuts to do the job. otherwise you will end up giving people tax breaks at the invest of investing in our kids
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education and that's not something that away tonight to the. >> eliot: you may have to equalize ordinary and capital gains rate. they recognize that is one of the tax reforms that should be considered. it should be become part of our every day conversation. it's right in terms of economic, in terms of equity. i'm not sure that the democratic party should believe that it's a fiscal cliff is a cliff. it's not a cliff. it's a hill. and the spending cuts, the seq sequestration should be looked at slowly. if you play into their hands that cataclysm breaks out on january 1st. i think you should challenge that notion. >> with respect to capital gains. when we did tax reform with
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ronald reagan. they equalized capital gains with ordinary income. with respect to the fiscal cliff, look, i would say that we do not want to go over the fiscal cliff, but this choice is in republican hands. i think they're going to make a huge mistake for themselves if they continue to say unless this very high bonus tax break that no one else in the country gets tax relief. then they would be taking us over the fiscal cliff in a way that is totally politically un unsustainable for them. imagine if the president goes on television january 1 january 2 january 3 and saying, are you kidding me, americans won't get tax relief unless there is a bonus tax break on top of
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$250,000? it's time for john boehner to make sure he gets his caucus on board to do the right thing. >> eliot: the president should entice them to get to that point without caving. the president should be as rigid as a piece of steel and not cave. i don't think it will be quite the cataclysm people are saying. read paul krugman's article in "the times" today. frankly, it's a lot of wall saying you got to deal with it because wall street guys have been wrong about virtually every economic forecast they've made. let them scream that the sky is falling. it really will not. i want to switch gears for a moment. the recent move on the part of the republican party to rush for immigration reform. that is an affirmative outcome of the election. do you think it's doable? >> yes, i do. if republicans learned one lesson and hopefully they'll learn this one, it's that they were totally on the wrong side
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of the issue of immigration reform. they ended up nominating the candidate who was to the far right, the guy who said he would even veto the dream act if he were president. republicans clearly paid for it at the polls. i do think that this is an opportunity finally to get comprehensive immigration reform, the republicans finally have an incentive. if they didn't want to do it because it was the right thing to do, at least now they have a political rationale for moving forward. >> eliot: even on their right wing radio hosts they're saying we got to get the immigration issue behind us. they're recognizing--i don't know if they care substantively but i think the lesson they learned, latinos vote. i don't know what world they live in, but some how this is maybe news to them. another issue that has lingered that we would certainly love, many of us would love to see on
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the agenda is climate change. the president alluded to it in his rousing speech after he had won. do you think there are enough votes in the house across party lines? can speaker boehner be persuaded to bring the issue of climate change back to the floor? >> you know, eliot, i think this is going to be a work in progress, but we should start it right away. because i think the american people are recognizing every day the consequence of climate change. with the super storm and the other really dramatic climate event that we've seen around the country from droughts to huge floods. the number of these incidents clearly tract an aggregate according to scientists to climb change. it's having real consequences on the pocketbooks of the american people and throughout the country. so i think now is the time to have that conversation, and i think it's one that at least
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some republicans would be willing to have. look, you're always going to have the climate change deniers. people just have their head in the sand. there are creative ways we can begin to address this issue. >> eliot: i think there are creative ways. if you think of the strength the president has right now with granted you're still unfortunately congressman in the minority in the house, but you have greater strength than you did before tuesday, he has the opportunity to move a genuinely progressive agenda because the dynamic on taxes has dynamic on immigration has changed, the dynamic on climate change has changed. you can see something taking shape there that was fundamentally different than what was discussed pre-election. i think you and the president have the capacity to do it. >> i think those are all three areas that should have priorities of moving forward. the first item of business is the issue of jobs and the fiscal cliff. however, there may be an opportunity to deal with some of
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the climate change issues as part of that budget. after all part of it deals with tax incentives for clean energy, and part of it deals with trying to find disincentives for the the--emissions that contribute to climate change. there may be room for that conversation. i don't think that's going to happen in the next six weeks but it certainly could happen as part of the conversation over the next six months on the larger agreement on both jobs and dealing with the long-term budget deficit. >> eliot: there is ground to cover before we get to the coalition necessary for carbon tax. obviously--i happen to be the view that that's the right way to go for climate change issue. >> you'll have to send price signals, and that's obviously one way to do it. congressman chris van hollen, ranking member of the budget committee. as always, thank you for coming on the program.
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>> eliot: i said it give it up. >> make some noise for jim breuer! >> go (bleep) in your (bleep)ing hat. >> i knew he needed to get out of the house i knew this would give him so much life. >> (grunting) >> i love getting a rise out of him. >> nice, good job. >> (grunts) >> goodnight, muffy. >> goodnight. >> love you. >> "more than me" the world television premier. only on current tv.
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>> eliot: putting a few hispanic faces on stage for the g.o.p. convention simply wasn't enough. republicans are now asking seriously, how do they >> eliot: point one, latinos vote. something most folks understood before tuesday--republicans apparently not.
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point 2. it is never too soon to think about 2016. point 3 points one and two mean that republicans will change their views on immigration. even rabid right-wing radio hosts like sean hannity seem to get that. >> we've gotta get rid of the immigration issue all together. it's simple for me to fix it. i think you control the border first, and you create a pathway for those people who are here. you don't say you gotta go home. that's a position that i've evolved in. >> eliot: joining me now political reporter joe williams and molly start with you. this is pretty quick, pretty dramatic. they didn't get a single vote from the latino community. some are saying, oops, now we got to embrace you. what will the immigration platform of the republican party look like. >> i think there has been a
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desire for immigration reform, they've been terrified of the base on this issue, but the fact is the republican establishment and allies in the business community want this supply of labor. so this is sort of an excuse for them or an occasion for them to do what they've wanted to do for a long time. i mean if you remember immigration reform passed the senate with 62 votes in 2006. part of the reason that it didn't end up getting done under george w. bush was that democrats didn't want to give bush the win on the issue. >> eliot: how far do you think the republican party go? the dream act and leave will they do something comprehensive like citizenship. >> comprehensive reform, which is going to be very difficult and some form of the dream act or legalization in a form of being allowed to get a work permit or something.
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i want to say i don't think this issue is going to be settled in even two years. you have a republican old bull establish, the older network members of the tea party who are actively pushing back against immigration reform saying they don't need to soften their position at all. they say they just need to change how they sell it to latino voters. they don't want to change it fundamentally but have a softer language and blame mitt romney for not delivering the accurate message. we need to secure borders first and then start talking about other aspects here. i don't think it's completely settled argument on the right. at least north right away. >> eliot: i think joe's right. there is a schism in the republican party but it's an imperative that they get this issue, and sean hannity said in this little clip that we played, they got to get this issue off the table.
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so doesn't the leadership of even the tea party that was initially driven by fiscal issues rather than social issues, don't they say bite the bullet. get rid of this, and give boehner permission to get rid of it. >> you certainly do have those hard right voices steve king said we can't do amnesty. this is not the way to go. but what we have seen in the election results, the republicans who do want immigration reform and marco rubio is a powerful voice in this regard, they've seen an advantage that they can press in making the argument they just can't win elections any other not only do hispanics vote but more of them vote because it is a growing section of the electorate, and in part because of the action that taken on the dream act this summer, president obama managed to get them out to vote for him. there was a question that they
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would stay home because of his lack of action on comprehensive reform. it has mobilized, the republicans really have an incentive to come to the table and say to the elements of their base whether or not they're given permission, just to say to the elements of the base we're not going to live to you this time. >> eliot: i would add one layer more vote every election. more vote by greater percentage, and more vote in swing states every election. if you look at colorado, ohio, florida, new mexico, arizona these states are becoming blue states because of the latino vote. joe, i just got to be of the view that mitt romney, if he took one lesson away from this, is that he was completely wrong in the emgrace of embrace of that view and it cost him the presidency. >> that is the lesson. they just have to look at the table and look at long-term
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friends, the republican base rather, of older white voters is going to be a distinct minority. it's been going down every year as a portion of the electorate, and it's going to be very small 2025 and so looking out it behooves them to resolve this sooner than later. they're going to have a problem battling the jan brewers of the world and the base in trying to convince them because it's been so hard for them to hear reality so far this election cycle even though the statistics point to the fact that this is the way to go. you still have a lot of voices out there who are saying we don't want to do it, and we're going to fight for the last person. that last person may get. but certainly they're going to have to do something. >> eliot: a party of angry old white men does not win. they will jan brewer just to stay home and ignore her. that's the only sensible thing to do. let's switch gears.
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the tea party took a thumping when some of their primary voices were sent home. allen west no longer a member of the house of representative. what happens on the hill when they get together, whether it's this week or whenever it is, do they try to recalibrate or does this create a siege mentality. does it drive them deeper and make them more rabid. >> what we know about the tea party caucus is that it will be smaller. not that much smaller. steve king, michelle bachmann barely hung on by the skin of her teeth. they both had tight races. but those aren't the members of congress we'll see change or moderate their all can they still hold the rest of the house republicans hostage given there are fewer them? are there still some of those freshman from last time around, are they still on the same page, or do they feel feel more like they
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need to make a deal, less of a hard line. that's more of the question. what tone do they take, not just within it, but outside of that tea party caucus. how many people listen to them. if you look at the exit polls only 51% 21% said they supported the tea parties. >> cenk: and does john boehner say, i no longer will i be yanked up and down based upon your whim. joe, everybody is talking about 2016. it's almost pathetic, and i hate to participant in that silly yapping. many people are saying is it bush-clinton all over again or is it hillary versus joe biden. >> that would be an interesting one. joe biden has made a lot of comments that seems to suggest that he's interested, and might take a go at 2016.
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maybe hillary clinton? i don't know. i think a deal would be worked out before then if it does come down to those two. right now you have to take hillary clinton at her word and say she's probably not going to be in the mix although there is plenty of time for her to get tanned, rested and ready before that time. in the meantime, you have a bunk of new voices, new democrats out there and so they've got a deeper bench than they've had in a while. and o'malley not only managed to get a dream act passed, a same-sex marriage passed and casino gambling measure pass which many thought die a quick and sudden death. he did it on his watch and it will be talked about. >> eliot: martin o'malley is a great guy great friend. joe biden and hillary larger stars. superstars in the political lexicon. but we'll have to wait and see. thanks goodness it's four years off. political reporter joe williams
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>> eliot: coming up, the super donors who tried and fail to buy the election. karl rove has the munchies, admit mitt find the silver lining in his failure to win the presidency. when it doesn't fit anywhere else we put it in the view finder. >> hello, president obama. >> all right hey barak. >> hey, mitt what's new? ♪ i'm still ♪ rich ♪ i'm still rich ♪ as far as i'm concerned ♪ this went off ♪ without a hitch ♪ >> what are you going to do to celebrate? >> as soon as i finish my speech, i'm going to hop on a flight to colorado, and-- >> it was a big day for advocates for legalizing marijuana. voters in washington state and
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colorado approve ballot initiatives legalizing marijuana for recreational use. >> this is not medicinal. this is recreation abuse. >> there will be some hungry coloradoans. they shouldn't break out the cheetos too quickly. >> what about mallomars. >> what's to keep someone from getting all potted up on weed and getting behind the wheel. nothing ♪ oh, i never wanted ♪ that low-wage ♪ job of president ♪ for my career ♪ >> president obama of him watching michelle, look at this photo. if you're wondering what the least retweeted photo of all time. here we go. it's karl rove.
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>> happy little weasel karl rove i think they just-- >> he looked like a pissed off humpy dumpy. >> he looks like someone took a tire pump and inflated larry david. he looks like a rush limbaugh had sex with a beanbag chair. >> that's so messed up. ♪ i'm income hiding ♪ in luxury ♪ yacht buying ♪ rich ♪ >> eliot: almost too bad the election is over. big money give it up. >> make some noise for jim breuer! >> go (bleep) in your (bleep)ing hat. >> i knew he needed to get out of the house i knew this would give him so much life. >> (grunting) >> i love getting a rise out of him. >> nice, good job. >> (grunts) >> goodnight, muffy. >> goodnight. >> love you.
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♪ ♪ >> eliot: if such a thing is possible, tuesday night was a very bad night to be a billionaire. especially if you donated generously to the super pacs supporting mitt romney's bid for the presidency. with all the talk of money influencing our politics, the question after this $6 billion election what did all that money buy? we have political reporter nick confesori. thank you for joining us. >> you're welcome. >> eliot: the inroads that they made the influence they would buy, but in the end they lost. >> here's what i would say it turns out that mitt romney and the republicans were not lying when they they faced
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$1 billion onslaught from barack obama. they did face $1 billion onslaught from abraham. one way they kept it competitive was super pacs and outside spending. every was looking for the wave of outside spending to swamp obama. what really happened was that romney needed the wave of outside spending just to draw even with obama. when you look at the advertising stats what you see is because of the deployment of money obama had more ads on the air than romney for most of the election. >> eliot: if you look at both sides an presume that the money came from a centralized limit the people on the republican side but the amount of money spent. if you cut the money in half would it have changed anything, do you it close to zero because
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people after they had seen the ad 10 times, 12 times it doesn't matter. >> that's a great question. i'm a guy who covers money in politics. it's easy to break down money but the truth is money is a threshold thing. it's not the whole ballgame. it gets you in the ballgame. the candidates matter. the message matters. the campaign matters. what we eventually saw was kind of a financial wash on both certainly for the candidates on their fundraising with their parties and ultimately for the advertising spending and a lot of it came down to how you spent your money including on tv and ground game. you know, it's easier to talk too much about the role of money. it's a big deal but in this case it wasn't adecisive difference. when you look at the net conservative advantage for outside spending in the election
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only, it out $200 million. it's not pocket change but only about 10% of the 2-point billion dollars that were spent on the presidential election all told. so again it wasn't just this overwhelming amount of money. >> eliot: i think you make an important distinction. there is one thing to alter the outcome. it's another thing for the money, even if it doesn't effect the outcome to be corrosive for the candidate. it alters the relationship between the candidate and the general public. creates the access and it's a core roarsive even if the outcome isn't changed. the argument for getting rid of the money is overwhelming even if it doesn't alter it is that a fair interpretation. >> super bowl didn't need the super pac. he had his aide start a super pac, and when they couldn't
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he sent his other aides to raise the money just like mitt romney did with the super pacs. that's all legal. you can raise money for super pacs if you're careful. both parties are full participants in the world of unlimited money. they're full apartments in setting--full participants in spending more time raising money an less money talking to people. a tally of what each president does said the president went to more than 200 fundraisers during the campaign. 24 states, puerto rico, and d.c. he went to half as many campaign rallies in nine states during that period. he literally spent more time at fundraisers talking to donors than he did at campaign rallies talking to voters. >> eliot: that is fascinating.
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that is statistic. that ratio is jarring and deeply troubling. is there any movement on capitol hill to pass legislation to corral super pacs or even just the disclosure of where the money comes from? >> you see this emerging deal on the table from republicans where essentially having surgeonerred in super pacs they're trying to tell the democrats look, you're incumbent. isn't it time that we got rid of the limits on contributions to candidates? instead of all of that money going to super pacs. why not bring it into the campaign committees, in exchange maybe we'll think about nor disclosure for those outside groups those 501 c 4 groups that currently don't have to disclose. that's the deal they're offering. take all that super pac money
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and make it candidate money for disclosure. i think they see it as a bad deal and they're not going to jump on it. >> eliot: sounds like the judge who turns to the two lawyers you gave me $500. he gave me $1,000. you give me an extra $500 and i'll decide it on its merits. wall street for the president was not a good one. is wall street trying to rebuild that relationship, and if so, who are the emissaries going to be. >> there is no shortage of wall wall street people next to the president, it's been a bipartisan industry for a long time. it's only in this election cycle, a face of policy implications and mild, in my opinion, criticism barack obama two or three times over the last
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four years. hedge fund guys were steamed by being lumped in with the subprime lenders. you hear people say that hillary clinton runs for president those guys will all come roaring back in a second, they won't think twice about it. as far as who the ambassadors are, it's not going to be goldman sachs this time, the long-time power brokers of the d.c.-wall street access. they've turned against the president. but you have people in the hedge fund world and you can imagine it being repaired. >> eliot: wall street has very very thin skin. all right p nick confesoore. thank you for your time this evening. >> thank you. >> eliot: ripp
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>> eliot: mr. president. call their bluff. th give it up. >> make some noise for jim breuer! >> go (bleep) in your (bleep)ing hat. >> i knew he needed to get out of the house i knew this would give him so much life. >> (grunting) >> i love getting a rise out of him. >> nice, good job. >> (grunts) >> goodnight, muffy. >> goodnight. >> love you. >> "more than me" the world television premier. only on current tv. >> eliot: elections have consequences, though sometimes you have to peel back a few layers of the onion to see them. even though control of the white house, senate and the house remain the same, the dynamic in current negotiations among them has been turned on its head.
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hence, the manifest desire on the part of republicans to reach an accord on immigration reform. someone in the republican party must have finally taken note of the fact that latinos do, indeed, cast votes. that's good news everybody. well except sheriff joe arpaio, of course, maybe, just maybe he'll be exorcised from our national political dialogue. yet republican posturing on the so-called fiscal cliff and it's related issues namely the debt ceiling tax rates in particular, has remained uniquely similar to what they said on countless occasions before last tuesday's elections. absolutely no give on the notion of raising tax rates on the wealthiest. the republicans continue to repeat their favorite meme: just close loopholes, without ever specifying which or explaining how it's mathematically possible to close loopholes and raise enough revenue without crushing the middle class.
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why no explanation? simple: it can't be done. they don't give any ground on the fiscal platform. whether they're right debate. with you what is certain is that they are wrong substantively. that's why i and many others, see paul krugman's piece in "the new york times," state request a certain passion no deal. mr. president, do not make a deal on fiscal issues with the republicans right now. call their bluff. stare them down. tell them to go over the cliff and enjoy the ride. the public gets it. the public understands that the rates should go up for the wealthiest. look at every poll on the matter. look at the outcome of prop 30 in california. mr. president, you need to tell speaker boehner that the time for elliptical answers and vagueness is over. tell him if he wants to have a substantive conversation on fiscal negotiations, it's time
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for him to put his cards on the table face up. ask him to explain exactly which loopholes he would like to close. ask him to explain how those loopholes could be closed without designating the middle class. tell him the time for specifics mr. president, it's time to announce specifics. start with the capital gains rate. make it clear this is an essential part of any deal. capital gains should be taxed as ordinary income. there should be no difference. mr. president. it's time to be tough. that's
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>> eliot: it was a break up letter read around the world. and it made one former wall street insider greg smith a 12-year veteran and vice president at goldman s
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op-ed published in new york sometimes. while they denied the characterization, and many continue to question smith's motives in going public. his accusations a familiar critique. >> getting an unsophisticateed client was the golden prize. the quickest way to make money on wall street was to take the most sophisticated product and try to sell it to the least sophisticateed client. >> greg smith author of "why i left goldman sachs" joins me now. i thank you for for your time. this has been very incredible important. >> thank you for everything you've done. >> eliot: give us an example of an unknowing customer is taken to the cleaners. >> a few years ago there was a
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thing called abicus, a product where the motives behind the product were not clear to the client. there was an idea that we don't owe the client anything, whether it's teacher fund, charity, they're out there on their own. this is still being sold to clients. they are createed and then sold to the least sophisticated clients who don't realize they're paying money up front in fees because these products are so opaque. we've had hurricane sandy something that infuriates me, i see the red cross advertising. clients like the red cross and other charities do business with wall street. i have seen clients like that get ripped off many, many, many times in products that ultimately the fees have taken out of people's donations as
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much as charities, university endowments teachers pension funds. jamie dimon world where they testify in congress, they say these clients are big boys. they don't come to goldman sachs and stanley are coming for advice. >> eliot: the conflict of interest inherent in a company a big as goldman sachs the question for people like you where does my loyalty go? to the firm which generates fees or to the client to whom i give advice. how do you navigate through those conflicts? >> it's very hard. you'll remember early in the decade a number of regulatory things happened. glass-steagall was repealed. derivatives were deregulated.
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goldman sachs tigged out how to exploit these conflicts of interest, and trading revenues go from $5 billion to $32 billion in five years. that is largely based on getting better and better at learning how to walk the fine line between exploiting conflicts of interest. in my mind i would say if you want to be a hedge fund, take down your first business principle who says our clients interest always come first. and stop taking government support. there is this perverse perception that banks can do whatever they want. if something goes wrong the person leaves their job with a $50 million golden parachute. yet if things go badly wrong? society is left holding the bag. in my mind a lot of these things are accepted as business as usual, and they need to be made illegal to stop them. >> eliot: what became a cliché was the safety net for the banks.
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the upside, they own get the upside. in your book you described the process of a culturization. they bring you into the culture of goldman. was part that have process teaching you or do you ignore this and say look, figure it out on your own. >> as you know in 1999 goldman company. they go public and the mentality starts to change slowly. until today goldman is still teaching its analysts our clients interests always come first. we need to have integrity. but the truth is a blind eye is turned. after goldman settled the lawsuit, i really wanted the firm introspect. it did something a business practice committee. i would sit in hour-long meetings where partners would read down the list of the ways the conflicts were being fixed. he would go back to my desk, and
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then try to figure out how to do elephant trades. trades that bring millions of dollars with usually an unsophisticated client. in my mind that's hypocrisy when publicly you're saying one thing and then privately you're not practicing that thing. it disillusioned me and it coming out of--disillusioned those coming out of college on to wall street. >> eliot: how do i maximize my fees an revenues versus what do i owe my client. use the hedge fund for your own account, god bless you. but if you have a client obligation that's fundmently different. >> there was a sense we're not going to do toxic business. a goldman a decade ago would not have done a deal like i talk about in the book. we would not have had a member
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of the board of director sent to jail. i would just say it comes to a point where the firm needs to make its own choice. does it want to last another 10 years or does it want want to be a hedge fund. >> eliot: all these sanctions imposed by courts, has it mattered? >> i think people know the game could end any day, and it's an extraction of as much wealth while they can while the holding is still good. hold politicians accountable. make them regulate things in a smart way that does not risk all of society. >> eliot: i won't place a big bet. >> people should be outraged. >> eliot: they should be outraged. greg smith is the author of "why i left goldman sachs." what you wrote is important. people should read your op-ed. have a good night. we will have a great
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